Question

In a laissez-faire capitalist system, what is the role of the government in the economy?

• A. Active intervention to regulate markets
• B. Minimal interference, allowing markets to self-regulate
• C. Complete control of all economic activities
• D. Centralized planning of production and distribution

Answer 1

Answer:

B. Minimal interference, allowing markets to self-regulate

Laissez-faire

• Laissez-faire is an economic philosophy of free-market capitalism that opposes government intervention.
• The theory of laissez-faire was developed by the French Physiocrats during the 18th century.
• "Laissez-faire" is a French term that translates to "let it be" or "leave it alone" in English
• Laissez-faire advocates that economic success is inhibited when governments are involved in business and markets.
• The philosophy emphasizes the autonomy of markets, where prices are determined by supply and demand, and resources are allocated based on these market signals.
• Strong protection of private property rights is a fundamental aspect of laissez-faire capitalism.
• This includes the right to own property, intellectual property, and other assets. The government's role is primarily to safeguard these property rights.